Yes, business school is expensive, so it’s worth thinking carefully about the financial side of going down the MBA route, especially if you are considering a full-time program.
First of all, ask yourself if you can afford it at all at this point in time.
Fortunately, most business schools publish pretty good data on tuition and living costs for their students, so take advantage of these reference points, and start mapping out a budget for your two years in business school. Take into account tuition, cost of living, and the interest you expect to pay on loans. Also look into scholarships and financial aid that might help you finance your education. With everything laid out on paper, the question of whether you can afford to get an MBA will usually answer itself.
With that question out of the way, you should start tackling the long-term considerations.
One of the key benefits of going to business school is increased earning power upon graduation, and again, schools disclose a lot of data on average salaries and bonuses post-graduation. Don’t forget also that an MBA can greatly increase the upper limit on your long-term earning potential down the road. So you can use these data points to start building a cost-benefit analysis for the MBA proposition over several years.
So the formula goes something like this:
Earning Potential with MBA
Less: Earning Potential without MBA
Less: Tuition & Fees
Less: Lost Income during MBA
Less: Interest on Student Loans
Equals: Net Benefit of MBA
If this is positive, go get your MBA. If it’s negative don’t.
Pretty dry, right?
If that’s your reaction, then your thought process is probably pretty similar to ours. While all these calculations are important and well worth considering, they only paint half the picture.
There are many aspects to business school that are impossible to quantify. First and foremost, it’s a great learning opportunity. It is also an experience in and of itself, and one that you will share with new friends who will in turn form the core of your personal and professional networks for years to come. It also provides a unique opportunity to re-invent yourself, switch careers, or steer your current one in a new and exciting direction.
So yes, MBAs are expensive. On the flip side they offer great financial benefits. But don’t let the decision of whether to pursue one turn into an entirely financial one. After all, financial challenges have solutions in the form of loans, scholarships, financial aid, or part-time programs that allow you to keep working while you pursue your MBA. And even financial benefits may have a dark side, in the form of more stressful jobs or longer work hours.
So make sure you look at the whole picture when deciding if business school is right for you, and don’t let the monetary considerations overly sway you in either direction.
For more specific information on how schools compare across various metrics, including average salaries and bonuses, and percentages of students employed at graduation, do check out Apply in the Sky and discover the new smart way to manage your MBA application process.
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